Financially Speaking: Financial Exploitation of Seniors
By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management AdvisorSM
Accredited Investment Fiduciary®
With our aging population, financial exploitation of seniors is a serious and growing problem. It happens throughout all economic levels and has robbed people of their savings, their financial security, their home and ultimately their dignity. We tend to think of criminal activity as obvious and violent. However, exploitation often begins with a much softer approach. By playing on emotions, money or other assets are often stolen through gradual persuasion, with the victim eventually signing over money or other valuables thinking they are doing the right thing by helping someone else in a time of need. Often there are promises of returning the “borrowed” money. Sometimes, the emotion is our own greed, as the exploitation may be a promise of returning the money along with a great rate of return. Exploitation can escalate through coercion, trickery, deception, and even harassment and threats.
I recently attended LPL Financial’s FOCUS conference in Boston with about 3,500 other advisors. Protection of seniors is of such importance that it was one of the few mandatory sessions that all securities licensed advisors were required to attend. Last year, the SEC approved amendments to FINRA Rule 4512, Customer Account Information, and new FINRA Rule 2165, Financial Exploitation of Specified Adults. As of February of 2018, advisors are required to make efforts to obtain the name and contact information for a client’s Trusted Contact person when opening or updating an account. The Trusted Contact person is an additional resource for advisors to consult when a complex situation arises, such as having concern for a client’s physical or mental well-being, or responding to possible financial exploitation.
If you do not have a Trusted Contact on the record of your accounts, contact your advisor or the company where your money is held and request detailed information on how this can help to protect you, and what the firm’s policy is on contacting the Trusted Contact. Additionally, it is always a good idea to let a responsible adult know some basics about your financial affairs – where to locate assets and/or who to contact on your behalf in the event of concern, death or disability.
The State of Wisconsin has put together a guide of common consumer protection issues facing Wisconsin’s senior citizens. It is an excellent resource and I encourage you to read it. https://datcp.wi.gov/Documents/SeniorGuide170.pdf
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.